Employers must consider the evolving generational mix in benefits strategies

Employee Benefits Connect 2016: Employers need to consider the changing generational mix within the workforce when developing their reward and benefit strategies.

In the opening keynote session ‘The evolution of our workforces and the implications for employee benefits’ at Employee Benefits Connect 2016 on 9 March, Nigel Jeremy, chief learning officer at British Airways, explained that key life events during employees’ formative years can impact how they interact in the workplace and what they expect of their employer, resulting in varying demands across the generations.

For example, a positive work-life balance may be key for generation X, while generation Y may be more likely to value flexibility and choice, and generation Z employees may place greater emphasis on stability and security while also embracing a diverse and unique culture.

Jeremy warned against grouping generation Y and Z employees together when designing benefits provision and communication approaches, explaining that their approaches to work and expectations of their employer can hugely vary.

Employers should take the differences between generations’ expectations and key values into account in order to develop a reward strategy that appeals to the demographics of their workforce today and in the future. The communication channels and devices that different generations are most engaged with should also be considered.

By 2020, generation Y and Z are expected to make up almost half of the workforce, said Jeremy, which could have profound implications for reward and benefits. Employers should therefore examine how they can meet the requirements and expectations of younger staff, whether through increased agility to meet changing demands, innovation in what type of benefits are offered and how they are delivered, giving employees greater responsibility in choosing the benefits that are most desirable to them through flexible benefits, or by examining what role digital plays in communication and engagement.

Jeremy (pictured) said: “Traditionally the reward approach with most businesses, particularly in the UK and Western Hemisphere, has been much more around a paternalistic approach. When you talk to [generations] Y and Z nowadays, what they are saying is, ‘give me something that I really want, but I don’t mind paying a bit for it’. So we need to get into a bit more of an adult dialogue with [generation] Y and Z in terms of providing a reward framework that makes sense to them, even if they have to contribute. Contribution is currently happening but it seems to be going further in the future.

“The pace of [generational] change is not going to stop, it’s only going to increase. There’s going to be something new in the next five years and what we are going to see probably in the next ten to 15 years is that we end up with a generational mix of Y, Z, and let’s call them [generation] A and B, and they will look remarkably different to the population that we have at the present time.”

Think globally, thank locally

Employers should also consider whether the benefits they provide to staff, and the manner in which they are communicated, are appropriate for the diverse cultural perspectives within today’s workforce, said Jeremy. This could include factors such as sensitivity and understanding of different attitudes towards leadership, ways of working and cultural norms and customs. Reward and recognition initiatives should be put into a local context to ensure that they are fully valued by staff.

Jeremy said: “[For reward] think globally as a collective in terms of your organisation, but thank locally in a way that [employees] can understand.

“Where you can, look at the local culture, talk to people in that culture and see if using a local translation service would be better suited for [communicating] reward.”